random cryptocurrency / cryptoeconomics thoughts #7
The below is ungroomed, thinking out loud, a collection of thought bubbles written as a messy tangle and has not been processed for concision/to make it easier to read. Patience and indulgence is required. There is not a sequential flow, paragraphs are ordered randomly. No effort was made to format for easier reading/viewing.
In crypto, you can overload your coin by placing too many expectations on it as to what functions and utility it should offer you. For instance, should you expect your coin to support your goals for full onchain (in-protocol) governance, whilst also expecting it to be a world-spanning neutral carriage for all participants and their divergent views? Did the early pioneers of the TCP/IP suite expect IP to support in-protocol governance decisional processes? We don’t expect TCP, UDP, SMTP, and IP itself to offer us in-protocol governance functions, so is it a mistake to expect BTC, ETH, XTZ to offer us in-protocol governance functionality? Where ought to be the natural level of abstraction that governance should ‘best’ (optimally, most usefully, most viably) reside at? Simplification effect: in the 1990’s, email client software came along and made the internet ‘real’ for billions of users. You could use the internet before 1993, but it was the technical preserve of the geeks. Gopher, Usenet, telnet, ftp, WAIS, IRC, archie. Around 2007, Apple came along and made the smart phone more easily useable (relatable, intuitive, touch screened) for billions of people, and usage/take-up mushroomed as a result. Welcome, iPhone phenomenon. Technology often benefits from simplifiers/maskers: those who come along, aggregate a bunch of geek tech and ‘simplify’ it into packages that ‘most folk’ can relate to. De-geekifiers. Does crypto/DLT/blockchain need the same? Maximalists might bristle at that idea, and suggest that crypto should never allow itself to be denuded of its technical entry barriers, that these barriers are themselves an inherent necessity that do their part in ensuring security surfaces endure that crypto arguably must retain if it is to remain (economically) non-censorable. We might say: “Proof-Of-Complexity works to secure the coin from newbie dumbing-down attempts.” The upward path of crypto might or might not require a trade-off of de-geekifying in return for maximised per capita take-up. If we made the iPhone equivalent of a crypto wallet/coin, that had a much more groovy (everyday, everyman) intuitive UX/UI, would billions of techno-everymen crypto-newbies suddenly opt in to crypto rather than fiat? The real Flippening. Will such a Flippening occur without such an ‘everyman-ised’ coin/wallet arising? Now that they have crossed the Rubicon and invested the brain time to learn the intricacies of how to work these once geek-only tech tools (iPhone, SMTP email clients, Twitter accounts), we don’t see the incidence of neoLuddites abandoning their iPhones and their Google-mail/MS Office apps. People aren’t regressing from AI-piloted electro-cars back to horses-and-buggies. This argues the case that the upward evolution of human society will exhibit a willingness to accept the brainwork required to take up ever-increasingly complex tools as they come along. Brainwork a.k.a. ‘processing fluency’. It could be argued that the establishment/emergence of nations/states/federations/commonwealths/kingdoms was an answer to the problem our ancestors faced of the tragedy of the commons. Large groupings of humans came to realise over centuries that some functions (health, education, military, police, taxation, law, etc) can only work optimally if the grouping established a higher-order/sovereign structure over it that was vested with coercive power to control the population underneath for those commonly-sought functions. Social groupings will self-police on some aspects of their affairs, but some behaviours will never allow altruism (game theoretic optimality in some cases easily defeats our altruistic urges) and so require higher, coercive oversight. Hence nationhood and federal law. The construction of such groupings e.g. nation states thus leads to the question: optimally, what functions (optimally) can/should be left at atomic levels e.g. each person or tribe, and what functions are best delegated up to the (coercive) federal/state/sovereign construct? Each nation (around two hundred nation states on planet earth) attempts this test. Ardor, Aion, Ark, Cosmos and Polkadot/Substrate are in some ways answers to the question: what aspects of a cryptocoin need to be kept separate/unique to each coin, and what aspects are better if communised/pooled. Cosmos, Polkadot et al offer slightly different answers to the question of: just how much consensus-making or security does a sub-chain/para-coin/child-chain coin need to do it self, and how much is it better off out-sourcing to a parent coin, that is probably better staffed/resourced to code-evolve over time on those functions? Just how many consensus experts will planet earth mint, and just how many different coin projects ought they work on, optimally? Not everyone who wants to fly from one nation/continent to another wants to become a pilot (or mechanic or builder) of a flying car on their own. Perhaps it’s better that we ‘pool up’ our planet’s allotment of ‘naturally good pilots’ and incent them to work for a few large airlines. The tragedy of the commons suggests that hoping that your federal resources will ensure non-gaming (non free riding, altruistic upkeep) of the commons is sometimes insufficient. Hence the word ‘tragedy’. Darwin gave us natural selection — the idea that the genes that are best able to adapt to change are those that are most fit to survive. Crypto so far has been a tour de force of game theory — agents will make the choices that best maximise their own outcomes, and if no better changes arise, then they have achieved a Nash equilibrium where no change will improve the current outcome. The future evolutionary end point that will direct the progress of crypto’s path forward is likely better understood as a mechanism design ( https://everipedia.org/wiki/langen/Mechanismdesign/ ) challenge — what does this black box called money need to be able to do, in order to meet the outcomes that we want? Crypto should be ‘designed backwards’: we should specify what outcomes we want, and only then go about designing our crypto mechanisms to meet those design goals. Darwin was a blind watchmaker, crypto cannot afford to ape Mother Nature; rather, we need to design backwards: currently, there is a Cambrian explosion of cryptocoin projects all two thousand+ of them each seeking to emerge as the eventual winner of the race of attrition (one ring to rule them all). This seems sub-optimal. It seems more optimal to instead agree a set of criteria, then work backwards from there to code it up into a reference codebase/coin. Or so I dream…. Crypto Norms My non-exhaustive list of things a cryptocoin/project needs (or should aspire) to have, if it is to be minimally viable/have a shot at achieving Lindy/Shelling effect superiority: · tamper proof = non-reversible, non forkable, partition-resistant or non-partitionable · manageable tx history (or else does pruning) a.k.a. chain bloat · immutable, asynchronously reaches 100% finality a.k.a. non reversible · benefits form scale/flash spikes a.k.a. convex to scale · sharding model/separable sharding (=horizontal scalability) for tx’s and/or state; advanced thinking about how to re-integrate sharded tx results, about avoiding bottlenecks/conflicts/bloat when communicating across/between shards · has thought about where it will store its dependency graphs for cross-shard communications = limits storage bloating · shard leaders/aggregators can resist DDoS attacks, e.g. elect the aggregator randomly · partition resistant/partition robust — 34% / 51% attacks; or, it never forks (e.g. DAGs); or, robust fork resolution mechanism; addresses BFT / transaction finality · user-selectable / per transaction privacy/obscurity/encryption · resists centralisation / anti-whale measures a.k.a. anti-cartel · zero fees / very low fees; or, high aggregated fees for the miners and low/zero transaction fee for the users · open source · smart contracts — functional economics model to pay for onchain VM computations; parallel/distributed execution of smart contract / VM logic / automatic network parallelization · quantifiable security for dApps along varying budgets, allowing for secure computation · Point of Sale/retail friendly · lite clients for mobile phones without significant security compromises · consensus protocol — ‘hot’ reprogrammable/can change over time as users change/evolve their thinking e.g. via governance · incentives for tx / smart contract processing qua mining; variable fee structure for varying computation/tx types, perhaps even $zero · sybil attack resistant / MitM attack resistant · long range attack resistant · DDoS attack resistant · quantum decryption resistant · cartel resistant · no government can fuck with it a.k.a. survives WWW3 · governance: some onchain, some offchain, variable and for users to decide the mix · treasury function to fund community devs and other in-your-own survival interest efforts · formal verification for dApps/smart contract language; considers Turing completeness/computation finality; fast confirmation times [Turing complete languages allow you to do slightly more than non-Turing complete. Specifically, Turing-complete allows the use of infinite loops while non-Turing complete do not.] · clean separation between computation and communication, layered approach to the stack · supports cold wallet model · not pre-mined; fair distribution; no hidden/unvested coin holdings · the coin/project tokenises altruistic behaviour — acts as a DAO, brings together many different participants who are all naturally incentivized (game theory, mechanism design) to contribute their time and resources to maintain the service. clear incentive alignment between users, whales, devs, foundation, treasury and stakers. Users have ownership of the products (coin, codebase) they use · labour contributed to the system can be measured objectively and is very difficult to game · highly decentralized sovereign censorship resistant base-layer protocol
Disclaimers: just my ideas about possible scenarios for near-term future. This is not investment advice. I’m ego-driven, clueless and biased, so do your own thinking. I’m not qualified, I have no special privileged position to drive my insight, I’m a nobody, is what you should assume about me and what I say here.